There’s a lot up in the air right now for Apple (AAPL), argues Wedbush analyst Daniel Ives. The analyst foresees some dark days ahead for the tech giant before emerging on the other side.
After speaking to supply chain contacts in Asia, it appears demand for iPhones has deteriorated by a further 15% when comparing current shipment numbers to the original expectations. In the current uncertain economic environment, this is hardly surprising.
“These data points are generally in line with our initial stress test model which significantly reduced our March/June iPhone units to reflect this near-term economic abyss,” Ives said.
Looking ahead to next week’s earnings report, Ives sets an ominous tone and believes the Street is prepared for a “Friday the 13th-like March quarter and June guidance.” Ives points out, bluntly, that “global lockdown has put health, jobs, groceries, and hand sanitizer well above buying a $1,000+ iPhone 11 on the consumer priority list in this environment.”
However, with the bad news out of the way, Ives believes investors will look through the macro challenges and focus on the upcoming iPhone 12 cycle. The problem right now is that all dates concerning the launch remain speculative as no timetable has been announced. The Street will be looking for clarity from Apple CEO Tim Cook, regarding this issue, in next week’s earnings call.
Ives believes the launch will be pushed back to the holiday season in order to ensure a smooth lift off for Apple’s leading product. The analyst points out that the logistics and planning that go into coordinating the release, “make the original Fall timeframe a very difficult one to hit.” Yet, despite the present uncertainty, Ives believes Apple has what it takes to weather the storm.
Ives concluded, “Our Asia checks and supply chain contacts are now looking at iPhone units in the 165 million to 185 million range for CY20 with strong underlying momentum into CY21 on the heels of iPhone 12… In sum, it will be some dark days ahead for Cook & Co given this unprecedented COVID-19 environment, however on the other side of the valley the pieces are in place for a robust product cycle into FY21 with a more normalized macro backdrop.”
The 5-star analyst keeps an Outperform rating on Apple shares, along with a $335 price target, which implies about 18% upside from Friday's closing price. (To watch Ives’ track record, click here)
TipRanks shows a large amount of bulls liking the odds here. Out of 35 analysts tracked in the last 3 months, 27 are bullish on Apple stock, 6 are playing it safe on the sidelines, while just 2 are running for the hills. Meanwhile, the 12-month average price target of $310.23 suggests a nearly 10% upside potential from where the stock is currently trading. (See Apple stock analysis on TipRanks)
To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.
COVID-19 has boosted the fortunes of several previously unknown biotechs. Case in point: Since the turn of the year Vaxart (VXRT) stock has shot up by a sky scraping 680%, on the back of its possible COVID-19 vaccine.
The surge has continued this week following an announcement that Vaxart’s oral COVID-19 vaccine program exhibited promising preclinical data. Specifically, the company reported that a number of its vaccine candidates resulted in immune responses in 100% of tested animals following a single dose. Furthermore, two weeks after the first vaccination, data indicated that all animals given one of the vaccines had IgG anti-SARS CoV-2 antibodies. In comparison to untreated controls, the antibody responses were statistically significant in all vaccinated groups.
Vaxart began preclinical studies for a COVID-19 vaccine in January, basing the program on its VAAST oral vaccines platform. The latest results compare well with the company’s oral influenza vaccine.
The announcement follows another positive recent development. In March, Vaxart signed a development agreement with Emergent BioSolutions. Emergent is expected to manufacture Vaxart’s vaccine candidate, in preparation for a Phase 1 clinical study, anticipated to go ahead in 2H20.
H.C. Wainwright’s Vernon Bernardino believes that despite the early stage of development, the results indicate noteworthy progress in identifying a lead candidate for a clinical trial.
Additionally, the 5-star analyst said, “In our view, the positive results were no surprise, given the favorable clinical profile observed in the company’s oral influenza vaccine candidate. We believe these preclinical results are in line with those for Vaxart’s oral influenza vaccine, which was protective in a clinical Phase 2 efficacy study… We believe the mucosal and systemic immunity observed, coupled with its oral, room temperature-stable tablet form, could offer logistical advantages over injectables during pandemic vaccination campaigns.”
Bernardino reiterated a Buy on Vaxart along with a $3 price target, which is right in line with where shares are currently trading after this week's double-digit jump. (To watch Bernardino’s track record, click here)
Over the last 3 months, no other analysts have published a review regarding Vaxart’s prospects. Based on Bernardino’s assessment, Vaxart has a Moderate Buy consensus rating. (See Vaxart stock analysis on TipRanks)